Overpaying vs saving for house move

moneymagic

Hello folks, I was hoping to get a little advice. We are looking to move home in the next 12-18 months. We are currently in the middle of a 5 year fix and hoping to port this to our next property and also get some additional borrowing. Our house is worth about 230-240k and there is just over 160k left on the mortgage. We would be looking at properties around the 300k mark so would be hoping to borrow another 60-70k. In the meantime, would we be better overpaying our current mortgage or saving up some cash so the additional borrowing would be less? Or would this really make any much difference (given the total mortgage value would be similar either way we do it) or would one way be looked on more favourably by the bank (currently with HSBC and I know they can be quite picky)? I.e. overpaying the mortgage shows that we could comfortably afford the increased repayments with the additional borrowing? 

TIA

MM xx

getmore4less

Cash gives a bit more flexibility and you need some available to pay for the move

moneymagic

We have cash saved for solicitors/stamp duty/ Estate agents etc, this would be additional cash over the next year

MWT

moneymagic said:

...I.e. overpaying the mortgage shows that we could comfortably afford the increased repayments with the additional borrowing?

I wouldn't oiver-think this, you'll pass or fail on the increased mortgage based on their criteria at the time. They are not going to factor in your demonstrated ability to pay more between now and then.

moneymagic

MWT said:

moneymagic said:

...I.e. overpaying the mortgage shows that we could comfortably afford the increased repayments with the additional borrowing?

I wouldn't oiver-think this, you'll pass or fail on the increased mortgage based on their criteria at the time. They are not going to factor in your demonstrated ability to pay more between now and then.

So I am probably best off just saving in cash and then using it towards the mortgage at the time of moving?

MWT

As getmore4less said earlier, 'cash gives flexibility'.

You won't influence the outcome of the mortgage decision by over-paying so just make the decision on other criteria.

There isn't a lot to be saved by over-paying for 12-18 months, but it isn't zero, so just decide if the flexibility or the small interest saving is more important. ...or just save the extra in Premium Bonds and see if you get lucky